Tobi Lutke, the CEO of Shopify and one of Canada's wealthiest individuals, has expressed sharp criticism towards outgoing Prime Minister Justin Trudeau for failing to prevent escalating trade tensions with the United States. These tensions have intensified following President Trump's executive order imposing a 25% tariff on Canadian imports. The tariffs come as a response to Canada's perceived inaction on issues such as fentanyl trafficking and illegal immigration. In light of these developments, Trudeau has warned Canadians of impending economic challenges.
Shopify, Canada's largest tech company valued at approximately $150 billion, is led by Lutke, who is estimated to be worth $10 billion. Canada remains a significant player in North American trade, acting as the US's largest trading partner with over $900 billion exchanged in goods and services in 2023. The United States imported $377 billion worth of goods from Canada in the same year while exporting $322 billion. Canadian crude oil exports have been critically important, comprising about 24% of US refinery production.
Lutke voiced his concerns about Trudeau's handling of the trade situation after the Prime Minister's meeting with Trump at Mar-a-Lago. Lutke believes Canada should have taken more proactive steps to avert the trade war.
"Canada thrives when it works with America together. Win by helping America win." – Tobi Lutke
The CEO highlighted the potential devastation that the tariffs could impose on Canadian citizens and businesses.
"These are things that every Canadian wants its government to do, too. These are not crazy demands, even if they came from an unpopular source. These tariffs are going to be devastating to so many people’s lives and small businesses." – Tobi Lutke
The economic relationship between the two nations is lopsided, with 75% of Canadian exports destined for the US, whereas only 13% of American exports head north to Canada. This disparity places Canada in a precarious position amid the newly imposed tariffs. Trudeau responded to the tariffs by announcing a 25% retaliatory tariff on $107 billion worth of US goods and advocated for policies targeting red states.
Lutke criticized this approach, suggesting that retaliatory actions could harm Canada more than the US.
"Leadership is about doing what’s right, not what is popular. And hitting back will not lead to anything good. America will shrug it off. Canada will decline." – Tobi Lutke
"It’s simply the wrong choice in a possibility space where much better options would have been available." – Tobi Lutke
Amidst these tensions, Trump has floated the controversial idea of making Canada the 51st state of the United States, promising benefits like lower taxes and better military protection.
"Canada should become our Cherished 51st State. Much lower taxes, and far better military protection…AND NO TARIFFS." – Donald Trump
However, this proposition has been met with firm rejections from Trudeau and other Canadian leaders who seek to maintain national sovereignty and independence.
"maybe (and maybe not!) cause some pain" – Donald Trump
As Canada approaches its elections in October, these trade issues are expected to play a significant role in shaping political discourse and voter sentiments. The economic impacts of these policies will undoubtedly be felt across various sectors in Canada due to its heavy reliance on trade with its southern neighbor.
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